Telegraph sale: new auction looms as bidder struggles on funding

The Telegraph’s suitors are preparing for a third auction of the newspaper as a New York bidder leading the race struggles to secure funding.
Bid teams are understood to be in discussions about how to pull together renewed attempts to secure The Daily Telegraph and The Sunday Telegraph in another round of bidding as it appears that the frontrunner’s deal is at risk of running aground.
Dovid Efune, 39, the Manchester-born publisher of The New York Sun, entered exclusive talks to buy the Telegraph newspapers four weeks ago, but he is yet to finalise his financial backing two weeks before the end of his period of exclusivity.
Possible bidders for the Telegraph include DMGT, National World and Lord Saatchi, the 78-year-old former advertising executive who was previously rebuffed with an offer of £350 million.
The Daily Mail and General Trust has distanced itself from a new bid in recent weeks, publicly stating that it is “not involved in the process and does not expect to be in the near future”.
DMGT was originally seen as a frontrunner in the race to buy The Telegraph, but the group pulled out in July over concerns of a lengthy competition inquiry.
A possible sale of the i newspaper could address competition concerns which have so far hamstrung a tilt from the media empire led by Viscount Rothermere, 56.
Meanwhile, David Montgomery, 76, executive chairman of National World, has been approached by new potential finance partners for a possible third bid as the listed publisher continues active talks over a return to bidding.
RedBird IMI, a joint venture part-funded by an Emirati royal, has been running a second auction of the Telegraph titles after its bid was blocked by ministers.
The venture had hoped to secure ownership of the Conservative-leaning newspapers by refinancing debts secured against the publications owed by the Barclay family to Lloyds Bank. The refinancing short-circuited a first auction of the 169-year-old title arranged by Lloyds, which drew interest from DMGT, National World and Sir Paul Marshall, 65, the co-founder of Marshall Wace, the hedge fund.
RedBirdIMI’s plan was scuppered when politicians in the House of Commons and the House of Lords raised concerns about the newspaper coming under the control of Sheikh Mansour bin Zayed al-Nahyan, 53, the vice-president and deputy prime minister of the United Arab Emirates.
RedBird IMI has now appointed bankers at Raine and Robey Warshaw to sell the Telegraph newspapers as it seeks to recoup its investment of £600 million. The joint venture is in control of the publications’ debt and is selling an option to convert the debt into equity.
Sources close to the joint venture had been hopeful Efune could arrange funding after he appointed bankers at LionTree, a boutique investment bank, to advise on a bid. Hudson Bay, a US investment firm with assets of $31 billion, was widely reported to have backed the bid, but its funding did not materialise, with one source close to the investment firm saying its representatives were on just one call about the deal.
A spokesman for Efune said: “We are progressing on debt financing with a number of reputable institutions and have high confidence in our financing path.”
RedBird IMI has not set out a definitive timeline for completing the deal and it is understood that complexities associated with finalising the details could lead to delays on the transaction, which has been in progress for more than a year.